Here’s a quick update on the status of the Scottsdale real estate market, looking at it from a “distressed” point of view.
First, a reminder of where the Scottsdale market was last year at this time. A quarter of the listings were either pre-foreclosures or lender-owned properties, yet these two types of sales accounted for almost half of the sales. Depending on the type of sale, listing prices in June 2009 ranged from about $180 to $350 per square foot. Sales prices ranged from approximately $140 to $210 per square foot, with normal sales being about 50% higher than distressed sales.
Looking at today’s market, you will see that not much has changed. More pre-foreclosures are listed, but not significantly more. Sales of lender-owned properties are down a bit, pre-foreclosures are up a bit, for a wash. Listing prices ranged from about $190 to $310 per square foot. In June 2010, sales prices ranged from approximately $145 to $215 per square foot, with normal sales being about 50% higher than distressed sales. Not a lot of difference. According to the Cromford Index, the market is a bit more distressed.
All in all, more of the same, a bit of bumping across the bottom as many have predicted. Only time will tell when, we start to see some significant improvement.
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For the sake of clarity, I have included the following definitions of terms that were used in this Cromford Report chart:
- The Distress Index gauge at the center shows a value from 0 to 100 which expresses the overall level of foreclosure activity.
- REOs or lender-owned properties have already been through the foreclosure process and completed their trustee sale. These properties were sold by the trustee to the beneficiary (lender). In a few trustee sales (typically less than 5% at the moment), the property may be sold to an investor or wholesaler who is prepared to bid higher than the bank. These properties are not classified as lender-owned.
- The Pre-foreclosure category includes those properties that have started the foreclosure process, but have not yet had the trustee sale. We also include those which are being marketed in a short-sale situation, even if a notice of trustee sale has not been issued. In a full pre-foreclosure situation, the owner(s) have received a notice of trustee sale and the property is being marketed in order to try to sell the home before foreclosure completes. Many of pre-foreclosures are in a “short sale” situation, where the price asked is lower than the outstanding debt secured by the home. Such sales require the approval of the lender.
- Normal sales are those where the owner has the unencumbered right to sell the property without requiring approval from a lender, court or external corporation of any kind, and the owner is not a financial institution. In a normal market, these constitute the vast majority of all listings and sales. The degree to which these sales become a smaller proportion of all sales indicates the level of distress being felt in the market.
- Active listings include active-with-contingency and are measured at the beginning of the calendar month. All figures are for single family detached homes only. Monthly sales means sales that closed during the preceding calendar month. The date shown at the top of the dashboard is the date on which this measurement was taken.
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